2017 (12) TMI 1366 - AT - Central Excise

CENVAT credit - sulphuric acid, a by-product - Sulphuric acid which was supplied to the fertilizer unit, no duty was paid and exemption was claimed as per N/N. 8/96 dated 23/07/1996; N/N. 6/2002 dated 01/03/2002; and N/N. 4/2006 dated 01/03/2006; N/N. 12/2012 dated 17.03.2012 - demand of 5%,6%,8%,10% of the value of Sulphuric Acid u/r 57CC of the CER, 1944 and Rule 6(3) of the CCR, 2004 - Held that - identical issue decided in the appellant own case Union of India & Others Versus M/s. Hindustan Zinc Ltd. 2014 (5) TMI 253 - SUPREME COURT , where it was held that the requirements of 57CC were fully met in the way in which the Respondent was maintaining records and inventory and the mischief of recovery of 8% under Rule 57 CC on exempted sulphuric acid is not attracted - appeal dismissed - decided against Revenue.

Summary

Issues:
Department's appeal against Order-in-Original dated 07/10/2016 for the period 1998-2015 regarding Cenvat credit on sulphuric acid supplied to fertilizer units without duty payment.

Analysis:
The appeal pertained to the Department's challenge against the Order-in-Original from 2016 concerning the respondent's availing of Cenvat credit on duty paid inputs and services, specifically related to the supply of sulphuric acid to fertilizer units without duty payment. The respondent, engaged in manufacturing Zinc Ores/Concentrates/Lead Ores, Zinc Cathode, and Sulphuric Acid, availed Cenvat credit under Rule 3 of the Cenvat Credit Rules, 2004. The Department demanded duty payment under Rule 57CC of the Central Excise Rules, 1944, and Rule 6(3) of the Credit Rules, 2004, for sulphuric acid supplied to fertilizer units.

The Commissioner, following the Supreme Court decision in Union of India v/s Hindustan Zinc Ltd., 2014, where the facts were detailed, dropped the demand made by the Department. The Supreme Court case highlighted the process of producing sulphuric acid as a by-product, its sale to various industries, and its supply to fertilizer plants under specific notifications. The Commissioner found the facts and circumstances of the present case identical to the Supreme Court case, thereby upholding the decision based on the established legal precedent.

Upon hearing both parties and reviewing the records, the Tribunal concurred with the Commissioner's decision, noting that the facts aligned with the Supreme Court's ruling. Consequently, the Tribunal dismissed the Department's appeal, affirming the Order-in-Original and the reasoning provided therein. The decision was based on the consistency with the legal principles established by the Supreme Court, leading to the sustenance of the initial order.

In conclusion, the Tribunal's judgment upheld the Commissioner's decision based on the established legal precedent set by the Supreme Court, resulting in the dismissal of the Department's appeal against the Order-in-Original related to the availing of Cenvat credit on sulphuric acid supplied to fertilizer units without duty payment during the specified period.